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In Gartner's annual Magic Quadrant report in August, it described SoftLayer as a "thought leader in automated, highly standardized infrastructure services" with per-instance, paid-by-the-hour pricing and automatic response to system failures.

IBM last month said cloud computing revenue grew 70 percent in its fiscal third quarter, surpassing the $1 billion mark for the first time. But only $460 million of this came from cloud services, while the rest was hardware, software and services. Plus, weak hardware sales caused IBM to miss its quarterly revenue forecast by $1 billion.

Despite losing the CIA deal, IBM has had some good news on the cloud front lately. It inked a 10-year, $1 billion cloud deal with the Department of the Interior in August and landed a $30 million cloud contract with the General Services Administration last month. IBM says it's aiming for $7 billion in annual cloud revenues by 2015.

Meanwhile, in Amazon's third quarter, North America sales in its "Other" category, which is mostly AWS, grew 56 percent year-over-year to $1.01 billion.